The Decline of Traditional TV
The writer’s strike in the US highlights some of the challenges that traditional TV is facing as the constant struggle for eyeballs continues. NBC, Disney, Paramount, and Warner Bros have all relied on television channels for profit growth. Now with streaming, poor box office receipts from new releases and the potential impact of AI television executives are recognising the new reality. Disney shares have fallen over half from their peak in March 2021. Paramount have experienced an 83% decline in the same period.
Movie ticket sales are down 21% from pre-COVID levels and recent poor box office response to films such as Indiana Jones and the Dial of Destiny, Elemental, The Flash, and Shazam, Fury of the Gods are having a profound impact on the operation of the major networks.
Pay TV is also being hit with subscribers in the US now sitting at 64 million compared with over 100 million in 2016.
The digital revolution continues and the move to consuming TV when you want it. The shakeout in subscription TV continues to unfold. Importantly advertisers need to understand the bigger picture and why the US writer strike is set to be so bitter and protracted. AI is a whole new ball game and with the focus on costs this new phenomenon is set to have major implications for the networks, and its employees.
In Australia we are seeing the same evolution with the growth of BVOD and a restructuring of costs. The recent challenges of the ABC to re-invent itself with an older demographic viewer illustrate that our journey in Australia will follow that of the US. Already the impact of the strike has been felt with many US productions being filmed in Australia postponed or halted.
Programmatic advertising continues to evolve and the software driving and serving ads to consumers is more sophisticated than ever. AI is likely to have strong benefits to advertisers and their media teams, but there are big questions about its impact on other aspects of communication strategy and the role it plays.
At Faith we continue to keep up to date with these trends, and are embracing the new software and programmatic tools at our disposal. There is no doubt the improvement you can achieve in ‘Return on Advertising Spend’ is dramatic and that advertisers must engage with those agencies with the technical skills and expertise to guide them through the maze of options available.
Whilst traditional TV is declining, it still has an important role. The trick is to use it along with the new tools to deliver a media spend that achieves improved results.